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Expert Surety Bonds Since 2004
Need assistance? +1 815-826-6324 (815-8-BondAI) phil@AmericasSuretyBonds.com
Expert Surety Bonds Since 2004
The amount on this bond is not a fixed number. Virginia sizes it at three times your expected average monthly alternative fuel tax, with a $2,000 floor and a $300,000 ceiling, so a small propane or CNG retailer and a high volume station can post very different bonds. A surety bond lets you meet the requirement for an annual premium instead of tying up the full amount in a certificate of deposit, and the bond is written on DMV form FT 462, the only bond form DMV accepts.
Virginia requires a Fuels Tax bond or certificate of deposit from a licensed retailer of alternative fuel that either stores highway and nonhighway alternative fuel in the same tank or wants to defer paying the tax to its provider until the provider's own due date. The amount is three times the expected average monthly tax liability, no less than $2,000 and no more than $300,000, under Va. Code 58.1-2246. The bond is payable to the Commonwealth and filed with the Virginia DMV on form FT 462.
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Virginia's alternative fuel tax is set out in Article 5 of Chapter 22 of Title 58.1. Under Va. Code 58.1-2244, anyone who acts as a retailer of alternative fuel must hold a license first. DMV defines that retailer as a person who maintains alternative fuel storage facilities and sells or dispenses the fuel at retail to power highway vehicles.
Va. Code 58.1-2246 ties the bond to two situations for a retailer. The first is storing highway and nonhighway alternative fuel in the same storage tank. A retailer in that position becomes directly liable for the tax when fuel is withdrawn from the tank, and 58.1-2255 requires separate metering devices for the highway and nonhighway fuel. The second is electing to defer remittance. Under 58.1-2252, a retailer that has posted the bond does not have to pay the tax to its provider until the date the provider must pay the Commonwealth.
The bond equals three times the applicant's expected average monthly tax liability. The statute sets a minimum of $2,000 and a maximum of $300,000. If you also hold a license that requires a bond under 58.1-2211, such as a distributor license, you can file a single bond covering both, capped at $300,000 combined. The Commissioner can require additional security if your volume grows, and you have thirty days to comply.
The Virginia Department of Motor Vehicles administers the fuels tax. Licensing runs through the VAETS system, where you open an account and complete the application online. Your surety files the bond with DMV on form FT 462, and DMV states that only this form will be accepted. As an alternative, you can file a certificate of deposit made out to DMV along with form FT 459, Assignment of Securities in Lieu of Surety Bond.
The bond runs year to year until terminated, so there is no annual refiling of a new instrument. The license itself is not transferable and stays in effect until surrendered or canceled. Every retailer of alternative fuel also files a monthly informational return, due by the 20th day of the second month after the reporting period.
The FT 462 bond guarantees that you will comply with Chapter 22, file accurate reports and pay all fuel taxes, penalties, interest, fines and related fees. If DMV makes a claim, the surety pays and then looks to you for repayment. Your premium is a percentage of the bond amount that the surety sets after reviewing owner credit, business financials and time in the fuel business.
Three times your expected average monthly alternative fuel tax liability, with a minimum of $2,000 and a maximum of $300,000 under Va. Code 58.1-2246. DMV can ask for additional security later if your actual tax runs higher than the bond covers.
Either storing highway and nonhighway alternative fuel in the same storage tank, or choosing to defer paying the tax to your provider until the provider's own due date to the Commonwealth. Retailers who want that deferral post the bond to get it.
No. Va. Code 58.1-2246 lets an applicant who also must bond under 58.1-2211 file a single bond covering the combined liability, capped at $300,000.
No. DMV states that the bonding company must file the Fuels Tax Bond form FT 462 and that only this form will be accepted.
The FT 462 bond continues from year to year until terminated. A surety that wants off gives written notice and is released 60 days later, but remains liable for amounts that accrued before and during that 60 day period.
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